This lesson is about marketing strategy formulation which consists of market segmentation, targeting and positioning. 8. Positioning:Position your product or service to appeal to your target audience. _____ segmentation is a very specific form of behavioral segmentation by which segments are formed based on when a product or service is purchased or consumer. A market is composed of people or institutions with need, sufficient purchasing power and willingness to buy. In a world that is getting more and more homogenized, differentiation and positioning hold the key to marketing success! In today’s marketplace, differentiation holds the key to marketing success. If we wish to broaden or change our target definition in the future, how flexible is the strategy? Implementationand practice shows how Segmentation, Targeti… The variety of different kinds of consumers and their needs is simply too large. The three steps of the STP process are: 1. In most cases, it alone is note sufficient for a meaningful consumer segmentation, Also basic and included as a variable in most segmentation analyses. Must be used in conjunction with analysis of consumer characteristics to allow identification of the individuals involved, Segment the markets based on several segmentation variables, Target a segment by identifying the fit between segment profitability and organizational capability, Position your product/service so that it occupies a distinct and valued place in the target customers’ minds, Segmentation helps the marketer by identifying groups of customers to whom he could more effectively ‘target’ marketing efforts for the product or service, Segmentation helps the marketer avoid ‘trial-and-error’ methods of strategy formulation by providing an understanding of these customers upon which he can tailor the strategy, In helping the marketer to address and satisfy customer needs more effectively, segmentation aids in the implementation of the marketing concept. Psychographic segmentation divides potential consumers based …, Market segmentation divides the target market into subsets of consumers …, In this article, we will discuss market targeting. In fact, in saturated and mature markets, you may even discover new opportuniti… With concentrated marketing (also known as niche marketing), a firm focuses its efforts on profitably satisfying only one market segment. Targeting plays a critical role in your marketing mix.If you are targeting the youngsters segment, then your products need to be more creative, more colorful and cheaper. Let’s take a closer look at each of the three steps in the STP marketing model. The heterogeneous marketplace can be divided into many homogeneous customer segments along several segmentation variables. Segmentation, Targeting, and Positioning Segmentation, targeting, and positioning together comprise a three stage process. What further details do we know about the target segment’s characteristics and market behavior? Which segment(s) represents our best market opportunity? Correlation of demographic and psychographic variables, Sensitivities to price, to the promotion and to place (channel), the characteristics of the buyer as a consuming organization. One way to think about positioning is to imagine a triangle, with the baseline anchored by the organization and competitor concerns and the apex, the customers. While undifferentiated marketing is efficient from a production viewpoint (offering the benefits of economies of scale), it also brings in inherent dangers. Benefits of Segmentation • • • • Effective use of resources Gain a focus Create Value for a target market Positioning Marketing for Hospitality and Tourism, 3e 2 3. Attainable market share given promotional budget and competitors’ expenditures. Occasion The third step of the market segmentation process is to evaluate segment , ______ which is based on such criteria as its profitability, responsiveness, and reachability. If you can use audience insightsto identify a specific desire or need in a group of people in your market, you will be able to focus your message and deliver it in a way that has a much stronger impact than broader marketing campaigns. As mentioned earlier, STP stands for segmentation, targeting, and positioning. Sales may also drop if new competitors appeal successfully to the same segment. For example, the travelling company presents itself as the ‘finest service for eco-vacation trips for newly young married couples’. Would other segments react positively to a similar strategy? The first segment includes people who are young and married couples and who are interested in eco-friendly and affordable vacations at exotic places. 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